The new poor left in the lurch

While generally the FY21-22 budget is business friendly, the same regrettably cannot be said about its provisions for the poor, particularly those who have been newly thrust below the poverty line due to reasons induced by the pandemic. It is deeply disappointing that the government, presenting the second budget of the pandemic, has not taken into account the economic effect of the pandemic on the poor and the marginalised.

The figures about the new poor vary. According to an estimate of the Center for Policy Dialogue in April, the pandemic has forced another 16 million people to join the nearly 20.5 percent of the population already living in poverty. However, another survey in the same month by the Power and Participation Research Centre and the Brac Institute of Governance and Development showed that the number of people affected by the pandemic is a good deal higher, by about 10 million. And this had happened even before the second wave of the pandemic hit. The World Bank figure of a 30 percent poverty rate jump due to the pandemic is even bleaker.

This means that the government has to brace itself for the prospect of more people going below the poverty line, but it won't know the exact number unless the BBS updates its 2019 estimate of poverty rate. Regrettably, the allocation in the relevant heads, do not indicate that the government is committed to helping the people already in poverty and the ones that have joined them newly. We believe that the social protection allocation needs to be beefed up. As it is, of the present outlay, more than a quarter has been set aside for pension for retired public employees. This is not only higher than the allocation of the last fiscal year; it outshoots the allocation for the social safety net schemes. What is disappointing is that allocation for such programmes as Work for Money and the Skills and Employment Programme has been slashed also—as has been done in the case of several programmes that address the needs of the marginalised, vulnerable and disadvantaged groups. On the other hand, allocation for government spending and investment, that would create jobs, has not been increased either.     No nation can claim to achieve economic equity with a third of its population in poverty. If a budget is meant to reduce the rich-poor gap, this budget does not. The finance minister should rethink and put right the glaring allocational inefficiency in the budget, to cater for the people in poverty, including the new poor.